Friday, August 14, 2009

Green Hoot - Only 5 bank failures this week

src="http://pagead2.googlesyndication.com/pagead/show_ads.js">and one credit union (see here and here). Clearly things are stabilizing, as only 6 financial institutions failed this week and only one (Colonial Bank) was a $25 billion institution with 346 branches. Keep in mind that the "massive bank failures" from the last "Great Depression" were in the hundreds to thousands per year, but this was before the day of counting one bank with 346 branches as only one failure. In other words, back in the 1930s, the failure of Colonial Bank alone would mean that there were 346 bank failures this week (and that's ignoring the other 5 failed institutions and their multiple branches)!

The Greatest Depression is intensifying right on schedule. The stock market hasn't discounted any of it and is dangerously oversold in the setting of obscene complacency given the fundamentals (see the last three paragraphs of this article). People who think the stock market has discounted the next wave of residential mortgage foreclosures, the current onslaught of commercial real estate walk aways, the massive pending regional bank failures (as if the ones that have occurred already aren't enough of a concern) and the tightening of the consumer belt that has been overdue for a decade are welcome to stay long stocks, commodities and corporate bonds.

Me? I'd prefer to stay in physical Gold, long Gold miners and short anything besides cash equivalents denominated in US Dollars. And believe me, once the pending deflationary wave ends in the next year or so, I'll be looking to take every US Dollar I've got and trade it for something else (probably more Gold and Gold miners).